Hungary is one of central Europe's most heavily indebted countries with a government debt-to-GDP ratio of around 80 percent, and the country sought a financial aid from the IMF to ease funding pressures, much like many of the troubled periphery countries in the eurozone.

The move by Orbán is indicative of rising hostility toward austerity measures attached to aid conditions in Europe as the euro area plunges into recession.

The International Monetary Fund is seeking cuts in Hungary's pensions, family benefits and an increase in personal income tax in return for a financing deal, the daily Magyar Nemzet reported on Thursday without revealing its sources.

The demands would collide head-on with the economic policies advanced by Prime Minister Viktor Orban, who has stabilized the budget with unconventional measures such as Europe's highest bank tax, which the newspaper also said the IMF wants scrapped..

Without naming its source, the conservative newspaper said the IMF also sought an increase in the retirement age, privatizations, cuts in public transport subsidies and bureaucracy, as well as a new value-based real estate tax.

In another potential hurdle to the aid talks, news website Bruxinfo reported on Wednesday that the European Commission was preparing a legal challenge against Hungary's financial transaction tax, a revenue mainstay of the 2013 budget.